What is BNB (Binance Coin)? – Lower your trading fees on Binance
Here’s a quick recap of the BNB token and how it reduces your trading fees on start trading right now!!
You have probably heard about or used Binance. Binance is the largest exchange in the world right now and is only for coin to coin trading. That means you cannot buy on Binance without previously owning cryptocurrency, check out Coinbase if you want to buy with a credit card or a bank transfer instead. Their platform is very fast and has a very good reputation amongst traders. (Read our review for more details about Binance or start trading right now!)
When you use Binance you pay a trading fee for each trade you do, which of course stacks up with many trades. Binance created the token to promote their platform and share some of the profits with their users. BNB or the Binance coin is the result of this and can be used to pay for your trading fees instead of the coin you will do your trade with. This is beneficial in two ways.
Paying for your fees with BNB helps you counteract coin dust, which means that you have small amounts of coins that are too few to withdraw or trade with, as it does not meet the minimum requirement to trade or withdraw. Having BNB to trade with minimizes the coin dust that can happen if you, for example, have enough coins to buy one full NEO. But when the trades are concluded, Binance have taken their trading fee and the result is you having 0.992 NEO instead of a full one. And Binance has a minimum withdrawal amount of 1 NEO if you would later want to withdraw that NEO from Binance. If you instead would have paid the fees with BNB your result would be the same as you originally had planned, but of course, you instead paid the amount with the BNB token.
The second benefit is the fee reduction. The BNB token lets you trade on Binance with a lower fee. In the first year of Binance existence, the fee is reduced by 50% if you use your BNB token! This will save you a ton of currency if you use Binance a lot.
The second year the fee is still reduced by 25%, third year 12.5%, fourth year 6.75% and fifth year there is no longer a discount.
This means the token will depreciate in value over time, but Binance thought about that ahead of time and have created a mechanism to stop the depreciation. To do this, they will burn tokens (destroy them) reducing the total supply from 200 million to 100 million over time.
They recently did their Q2 burn of 1,821,586 BNB burn which in today’s rate is 18 million dollars!
If you have not already started using BNB to pay for fees, make sure to buy some on Binance and press this switch on your profile.